KeNo's Housing and Economic Portal: Tuesday January 4 Housing and Economic stories

Monday, January 3, 2011

Tuesday January 4 Housing and Economic stories

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TOP STORIES:

Strapped Cities Hit Nonprofits With Fees - (online.wsj.com) Facing budget gaps and an aversion to new debt and taxes, states and local governments are slapping residents with an array of new fees—and some are applying them to nonprofits. That marks a sharp departure from long-standing tax exemptions mandated by state law or adopted on the theory that churches, schools and charitable organizations work alongside governments to provide services to the community. The issue is on display in Houston, where some flood-prone roads are in such disrepair that signs warn drivers, "Turn around, don't drown." Houston's taxpayers in November narrowly voted to adopt a "drainage fee" to raise at least $125 million a year toward the cost of improving roads and storm-water systems. The city will charge fees to property owners, and it won't grant exceptions to churches, schools and charities.

Head of L.A.-area business group resigns amid scandal - (www.latimes.com) William Mitchell is leaving the Better Business Bureau of the Southland because of his health, not criticisms of the group's rating system or his $400,000-a-year salary, a BBB official says. The head of the Southern California chapter of the Better Business Bureau has resigned amid a scandal over the group's letter-grade rating system and controversy over his high pay. William Mitchell, a 26-year employee of the Better Business Bureau of the Southland, is leaving because of health concerns, said Bob Richardson, the chapter's director of operations. The national organization, which issues ratings to businesses supposedly based on how fairly they treat consumers, has been criticized in recent months for giving businesses better grades if they became dues-paying members.

Bailed-Out Banks Slip Toward Failure - (online.wsj.com) Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing. The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program. When TARP was created in the heat of the financial crisis, government officials said it would help only healthy banks. The depth of today's problems for some of the institutions, however, suggests that a number of them were in parlous shape from the beginning. Seven TARP recipients have already failed, resulting in more than $2.7 billion in lost TARP funds. Most of the troubled TARP recipients are small, plagued by wayward lending programs from which they might not recover. The median size of the 98 banks was $439 million in assets as of Sept. 30. The median TARP infusion for each was $10 million, federal filings show.

How the City of Bell hit rock bottom - (www.latimes.com) In 1993, 39-year-old Robert Rizzo arrived in town trailing the vague whiff of scandal. For a time he seemed like the man the working-class city needed — until he became an 'unelected and unaccountable czar.' The new boss kept his office spartan and impersonal, the walls stripped of photos, the desk conveying no hint of his life beyond the red-brick walls of City Hall. It was 1993, a bleak, recession-bit year, and Robert Rizzo arrived in Bell trailing the vague whiff of scandal. His last city administrator job, in the high desert city of Hesperia, had ended badly, with accusations that he'd steered city improvement funds toward salaries. But the Bell officials who hired him did not dig deeply into his past. They needed someone fast, and Rizzo, then 39, came cheap. His starting salary was $78,000, which was $7,000 less than his predecessor had made. "He was willing to work for the least amount of money," said then-Councilman Rolf Janssen. "That was what attracted me and several other council members."

New fee for California businesses with delinquent taxes - (www.latimes.com) More than 90,000 California businesses could be hit with fees of up to $925 a year starting next week if they don't pay their back taxes to the state quickly enough. A law passed this year directs the California Board of Equalization to assess the fees on unpaid liabilities after giving the taxpayer a 90-day notice. Taxpayers can avoid the fee by settling their obligation before the 90 days are up. The Legislature and Gov. Arnold Schwarzenegger approved the fee to cover costs to the state of securing back taxes. The Board of Equalization collects state sales and use taxes and hears appeals on franchise and personal income disputes. The new collection fee ranges from $185 a year (for a tax bill of up to $2,000) to $925 a year (for a bill of more than $50,000). Installment plans are available for taxpayers who can't pay the full amount immediately. The board can waive the fee if the back taxes accumulated because of factors beyond the taxpayer's control.